Studsvik Ab · OMXSTO:SVIK
Studsvik Ab — FY2005 Earnings Presentation
32 slides from Studsvik Ab's earnings presentation, Feb 24, 2006
Slide 1: A Leading Global Nuclear Services Company
A Leading Global Nuclear Services Company Presentation of financial statement for 2005 on 24 February, 2006
Slide 2: Presentation
Presentation Magnus Groth, President and CEO Phone: +46 155 22 10 86 Cell: +46 (0)709-67 70 86 e-mail: magnus.groth@studsvik.se Jerry Ericsson, Executive Vice President, Deputy Executive Officer and CFO Phone: +46 155 22 10 32 Cell: +46 (0)709 67 70 32 e-mail: jerry.ericsson@studsvik.se 2
Slide 3: Financial targets
Financial targets Target Result 2005 EBIT margin 8% 8.3% Organic growth 5% 6.1%* (*Discontinuing operations excluded) Equity-asset ratio 40% 47.9% Dividend policy 30% of EAT SEK 2.00 PS (EPS 7.48) 3
Slide 4: A strong year after restructuring
A strong year after restructuring • Strong earnings development after restructuring • Materials testing reactors terminated after 45 years – Reduction by approx. 90 employees • Acquired engineering company in UK, acquired health physics business in Sweden • Break-through order for TTT in USA • Staff
Slide 5: 2005 in figures
2005 in figures 4Q-05 4Q-04 2005 2004 Net sales for the Group, SEKm 297.7 255.6 1,116.5 1,095.8 Operating profit 15.1 -165.0 92.4 -119.7 Net profit for the period -5.7 -97.3 61.1 -66.5 Earnings after tax per share, SEK -0.69 -11.84 7.48 -8.19 EBIT margin, % 8.3 Neg Equity-asset ratio, % 47.9 38.5 Eq
Slide 6: Services to the nuclear power industry
Services to the nuclear power industry 6
Slide 7: Operating Efficiency and Safety
Operating Efficiency and Safety • The world leader in test and analysis of nuclear fuel and materials • Software for optimizing operations and consultancy services • A leading position in a global market 7
Slide 8: Operating Efficiency and Safety 2005
Operating Efficiency and Safety 2005 • Strong demand for industrial software – Strong new business – Growing maintenance consulting income • Favourable development of order intake and earnings in materials testing • Reactor operations terminated as planned • Strategic partnership with Norwegian IFE
Slide 9: Outlook, Operating Efficiency and Safety
Outlook, Operating Efficiency and Safety Outlook Challenges • Materials testing • Position operations in – Growth market, a few years Materials testing as a solution ahead provider – Strong offering in materials testing through partnership with IFE/Halden • Industrial software – Large market share –
Slide 10: Service and Maintenance
Service and Maintenance • Decontamination, chemical cleaning, mechanical services and process cleaning • Health physics and dosimetry services • Leading position in Sweden and Germany 10
Slide 11: Service and Maintenance 2005
Service and Maintenance 2005 • More outage hours than in 2004 • Organizational adjustments in Swedish operations had a positive impact on profitability • Decision on organizational adjustments in Germany – Reduction by 85 employees – Costs already accounted for – Positive impact on profitability fro
Slide 12: Outlook, Service and Maintenance
Outlook , Service and Maintenance Outlook Challenges • Customers plan for fewer • Ability to handle short outage hours in 2006 outages and seasonal • Business opportunities a few variations years ahead through extensive • Improved margins Swedish investment programs – Higher technical content – Life
Slide 13: Waste Treatment
Waste Treatment • Treats low- and intermediate-level waste • Facilities in Studsvik and Erwin, USA 13
Slide 14: Waste Treatment 2005
Waste Treatment 2005 • Increased demand for waste treatment • Technology development concerning large components – Development project; Ringhals Steam generator treatment – Temporarily lower margins 2005 • Stable volume – temporarily lower margins in USA • TTT contracted to build waste treatment fac
Slide 15: Outlook, Waste Treatment
Outlook, Waste Treatment Outlook Challenges • Growing waste volumes • Production capacity in facilities – Life extension program • Improved margins in USA – Increased effect program • THOR:s waste treatment – Decommissioning of older technology facilities – Commercial NPP:s • Large volumes of metall
Slide 16: Decommissioning
Decommissioning Full service decommissioning service based on more than 20 years of experience 16
Slide 17: Decommissioning 2005
Decommissioning 2005 • Siemens project ended • German decommissioning market in temporary phase of lower activity – Organization reduced by 15 employees • Three NPP:s awaiting decommissioning permit • UK market established through NDA • Acquisition and integration of Environmental Remediation Servic
Slide 18: Outlook, Decommissioning
Outlook, Decommissioning Outlook Challenges • Firm sales in 2006 • Readiness for future large • NDA accelerates UK nuclear German procurements decommissioning • Strengthened position in UK – Procurements in 2006 – Build organization • Germany – Work up market – A large number of smaller – Win procur
Slide 19: Net Sales per Business Area
Net Sales per Business Area SEKm 4Q-05 4Q-04 2005 2004 Operating Efficiency and Safety 54.6 52.7 192.1 208.1 Service and Maintenance 66.7 54.6 279.7 237.7 Waste Treatment 96.7 75.2 333.7 302.8 Decommissioning 57.0 62.4 242.4 298.1 Discontinuing Operations -0.4 19.9 28.2 70.4 19
Slide 20: Operating Profit per Business Area
Operating Profit per Business Area SEKm 4Q-05 4Q-04 2005 2004 Operating Efficiency and Safety 10.8 -85.0 28.6 -80.8 Service and Maintenance 3.1 -4.1 11.9 6.8 Waste Treatment 10.2 10.7 39.8 49.7 Decommissioning 5.4 1.1 23.3 37.7 Discontinuing Operations -0.4 -84.9 13.6 -95.4 20
Slide 21: Market and trends
Market and trends • Growing market for nuclear-powered electricity – Extended lifetime and increased effect programs – Decommissioning of older facilities • Strong increase in demand for waste treatment • Growing service market in a few years time • Increased demand for specialist materials know-how
Slide 22: The Studsvik share
The Studsvik share THE STUDSVIK SHARE BB Number of shares traded OMX Stockholm ——— Small Cap Sweden (in thousands) sme Studsvik 225 200 Al 175 J 150 125 fd 100 75 50 25 2001 2002 2003 2004 2005 2006 Studsvik* 22 ©
Slide 23: Outlook 2006
Outlook 2006 General market conditions for the Group’s business areas are favorable. The nuclear industry as a whole is growing, with the strongest short term growth in waste treatment. All in all, the assessment is that the Group’s earnings before tax for 2006 will be in line with 2005. 23
Slide 24: Focus 2006
Focus 2006 • UK – Expand operations – Win contracts • Germany – Organizational resource utilization on the 2005 level – Positioning for future procurements • USA – Improved margins – Participate in the next federal procurement cycle • Europe – Develop the “large components” concept – Increased capac
Slide 25: A Leading Global Nuclear Services Company
A Leading Global Nuclear Services Company 25
Slide 26: Group Income Statement
Group Income Statement SEKm 4Q-05 4Q-04 2005 2004 Net sales for the Group 297.7 255.6 1,116.5 1,095.8 Cost of services sold -216.9 -344.5 -814.9 -985.5 Gross Profit 80.8 -88.9 301.6 110.3 Selling expenses -13.9 -15.1 -42.2 -41.5 Administrative expenses -38.0 -49.9 -148.7 -157.1 Research and developm
Slide 27: Group Balance Sheet
Group Balance Sheet SEKm 2005 2004 Assets Goodwill 127.4 120.8 Other intangible fixed assets 5.0 7.4 Tangible fixed assets 372.0 331.9 Financial fixed assets 99.0 81.5 Inventories etc 10.4 10.4 Accounts receivable - trade 167.3 139.9 Other current receivables 78.8 141.0 Current investments 54.8 – Ca
Slide 28: Group Cash Flow Statement
Group Cash Flow Statement SEKm 2005 2004 Operating activities Operating profit 92.4 -119.7 Depreciation 47.1 78.3 Other non-cash items -6.5 146.4 Financial items, net -4.8 -8.0 Income tax paid -28.2 -12.5 Changes in working capital -82.0 19.9 Cash flow from operating activities 18.0 104.4 Investing
Slide 29: Key Figures and Ratios
Key Figures and Ratios SEKm 4Q-05 4Q-04 2005 2004 Net sales for the Group, SEKm 297.7 255.6 1,116.5 1,095.8 Operating profit, SEKm 15.1 -165.0 92.4 -119.7 Profit after net financial items, SEKm 12.1 -169.4 89.8 -127.6 Earnings per share before dilution, SEK -0.69 -11.84 7.48 -8.19 Earnings per share
Slide 30: Major Shareholders
Major Shareholders Shares and 30 December, 2005 No. Shares votes, % Briban Invest AB 1 860 492 22.6% Familjen Karinen 1 778 012 21.6% Goldman Sachs International Ltd 315 750 3.8% SEB Sverige Småbolag 283 200 3.4% Handelsbankens Småbolagsfond 269 200 3.3% Blue Whale Ltd 256 246 3.1% Nordea Bank Finla
Slide 31: Organization
Organization Studsvik AB Operating Service and Waste Decom- Efficiency and Maintenance Treatment missioning Safety Studsvik Stensand Studsvik Nuclear AB Studsvik Nuclear AB SINA Industrie- AB service GmbH & Co Studsvik Studsvik Processing SINA Industrie- Scandpower Group Facility, LLC IFM Industrie-
Slide 32: Legal structure
Legal structure Studsvik AB (publ) Studsvik Studsvik Studsvik AB SVAFO Studsvik UK Holding, Inc. Nuclear AB Stensand AB Studsvik, Inc. Studsvik Scand- Studsvik power, Inc. 79 % GmbH Studsvik Processing Studsvik Scand- SINA Verwaltungs Facility LLC 90 % power AB 91 % GmbH THOR Treatment Studsvik SINA